Archive for the Creditor Harassment Category
The Ministry of Justice (MoJ) has formally shut down companies that offered to secure compensation for personal injury claims or write off debts. From April 2007 to August 2009, one hundred of these companies have been forced to stop doing business.
According to a spokesperson from the MoJ, the companies have been using high pressure sales strategies and making claims that are misleading in an effort to get consumers to pay large fees for their services. The spokesperson told the media that those who are desperate for a way out of debt are especially vulnerable to these tactics and only end up getting further into debt due to the unscrupulous tactics the companies employ. As a result, the government is warning citizens to be careful with offers that appear to be too good to be genuine because that is the lure these businesses use.
According to the MoJ, many of the companies that were shut down used extremely exaggerated claims in their advertising such as claiming that 80% of credit agreements were not enforceable or that debt from credit cards could be totally wiped out within six weeks. Other cases involved companies run by those who had fraud convictions or people ignoring the goverment claims regulator’s request for further information about their advertising claims.
The current regulations for this industry state that no in person cold-calling is allowed and a cooling off period of two full weeks must be given for anyone considering taking on a new credit agreement. This is means that it is better to find IVA (link!), Debt Management Plans (link) or other debt reduction services through a company that allows the customer to request the call by providing their information of their own free will. Instead, many of these companies were making their customers pay huge fees up front, knowing that the customers were already struggling with large debts and that the services they offered to them would not be carried out.
However, plenty of debt management companies still operated within the rules and did not use high pressure cold-calls or unsavory tactics to get the consumer to pay large fees. The Ministry of Justice Claims Management Regulator continues to tackle more cases in an effort to relieve the public of these financial predators, but as long as the claims the companies make are accurate regarding the chances of debt management success and the costs involved for the company’s services, no harm is done.
Hopefully, these companies will either change or continue to be shut down so that the public will be able to get the help they need without fear of fraud.
The Ministry of Justice (MoJ) has formally shut down companies that offered to secure compensation for personal injury claims or write off debts. From April 2007 to August 2009, one hundred of these companies have been forced to stop doing business.
According to a spokesperson from the MoJ, the companies have been using high pressure sales strategies and making claims that are misleading in an effort to get consumers to pay large fees for their services. The spokesperson told the media that those who are desperate for a way out of debt are especially vulnerable to these tactics and only end up getting further into debt due to the unscrupulous tactics the companies employ. As a result, the government is warning citizens to be careful with offers that appear to be too good to be genuine because that is the lure these businesses use.
According to the MoJ, many of the companies that were shut down used extremely exaggerated claims in their advertising such as claiming that 80% of credit agreements were not enforceable or that debt from credit cards could be totally wiped out within six weeks. Other cases involved companies run by those who had fraud convictions or people ignoring the goverment claims regulator’s request for further information about their advertising claims.
The current regulations for this industry state that no in person cold-calling is allowed and a cooling off period of two full weeks must be given for anyone considering taking on a new credit agreement. This is means that it is better to find IVA, Debt Management Plans or other debt reduction services through a company that allows the customer to request the call by providing their information of their own free will. Instead, many of these companies were making their customers pay huge fees up front, knowing that the customers were already struggling with large debts and that the services they offered to them would not be carried out.
However, plenty of debt management companies still operated within the rules and did not use high pressure cold-calls or unsavory tactics to get the consumer to pay large fees. The Ministry of Justice Claims Management Regulator continues to tackle more cases in an effort to relieve the public of these financial predators, but as long as the claims the companies make are accurate regarding the chances of debt management success and the costs involved for the company’s services, no harm is done.
Hopefully, these companies will either change or continue to be shut down so that the public will be able to get the help they need without fear of fraud.
Specialist Debt Support Unit
Debt problems faced by those with disabilities are often a combination of circumstances associated with the disability and related to having a low income that often results from physical setbacks. This lack of income can greatly increase the vulnerability to debt that people with disabilities experience, as well as restrict their access to basic services of necessity.
It’s been highlighted in the past that people living with disabilities face financial difficulties as an inherent side effect of their physical restrictions. Disabled people with debt concerns specifically face the consequences for the fact that their problems tend to stay hidden unless they have a particular means by which to deal with these problems.
In the UK, disability includes a variety of unique circumstances leading to debt that can include:
- People with physical impairments that require medical equipment for daily living
- People with mental health conditions that affect their everyday life
- A wide variety of learning-related difficulties can hinder understanding of aspects of debt and finances
- There are many types of sensory impairment that people suffer that can restrict their daily activities
Reasons for Debt from a Disability
There are a huge number of situations and factors that can lead to debt problems for those who are disabled that affect their lives and those who provide them with help. Here are just a few things possibly influential aspects:
- In times of personal crisis, financial concerns go understandably neglected
- Cost of respite care can lead to or increase debt
- Disability transport costs can lead to debt
- Cost of hiring people to provide care if one’s family cannot
- Because financial concerns are not focused on, benefits may not be claimed as they should
- Those who offer unpaid care often reduce their own finances to do so and their quality of life suffers as they try to help meet the needs of another suffering from a disability
- Often there can be a sudden drop in income when benefits halt or at the onset of the disability as a job is lost or a career left behind
- Dealing with debt can be difficult for those who experience a decline in their mental or physical health due to the stress of the debt itself
- Debt repayments can wreak havoc on already limited and fragile income
The Connections Between Disabilities and Debt
A great majority of those seeking debt help related to disabilities are either disabled people themselves or those who offer care. Often, one or both of these types of individuals are at a low income level or living in poverty.
These situations mean that debt is created in one or more of the following ways:
* Typically, a combination of circumstances and factors lead to debt form disability
* Costly, recurring purchases of specific items that are required by a disabling health condition
* Not enough assistance from the benefits system or none at all
* Often dealing with a disability means high telephone bills and high fuel bills
* At the onset of a disability or serious illness, debt can be acquired quickly as a person adjusts to the changes in lifestyle
* Expenses associated with a disability can lead to debts
* There can be a frequent need to replace cruical furniture
* Alteration of accomodations may be required
* A move may be needed to have a situation with better accomodations for the disabled
* Bearing the cost of replacing items damaged by a child with behavioural problems
* Those unable to use public transport may need to travel back and forth from the hospital by expensive taxis
* Income changes for those who take on the responsibility of caring for a disabled person, often the benefits do not match a previously earned salary for the care taker
Job Options and the Employment Market for Those with a Disability
Many disabled people experience a rapid accumulation of debt as they go through the process of adjusting to a disability or chronic illness. Even for those who find employment, the smallest alteration or additional demand put on their income could trigger debt struggles. Another reality is that merely being disabled can keep people excluded from obtaining a job. Despite strict UK employment laws, disabled people can experience difficulties if they are unable to seek work or work average hours.
A change in income like the loss of benefits or the earnings of a partner can also trigger debt. For those depending upon benefits long term, debts can not only be difficult to deal with, but may reoccur, as well. Just because a person is in receipt of DLA (Disability Living Allowance) does not guarantee that other goods and services are somehow affordable. Many times a person’s entire benefits end up being used to repay debts or simply meet general bills of the household.
Deferring Payments on Debt from Disability
If you have a disability you may need help deferring bills you cannot avoid as well as expenses such as rent or a mortgage or even council tax, heating bills and other basic expenditures. It is a good idea to contact bank or building society managers to arrange your mortgage and explain your situation if you are struggling with mortgage repayments.
Often building societies are prepared to suspend your payments for a few months to give you a chance to sort out your finances. It is extra helpful if you can have a social worker explain your situation in a report to give it extra validity in their eyes. You can also seek to extend your mortgage term in order to pay less monthly or even get it arranged so that you make interest-only payments in order to reduce your monthly expenses. You can often seek help paying the interest on your mortgage from the Department of Social Security.
If you speak with your local council office you may be able to defer your council tax payments and even get in touch with your local gas, water, telephone and electricity providers if you are experiencing difficulty making payments for these essential services.
If you have a neighborhood Law Centre near you, they may be able to advise you on issues regarding repayments. Get in touch with the Law Centres Foundation to learn more.
The Impact from Disability-related Debt on Those Caring for Disabled People
Giving care to a disabled individual can be both emotionally and physically demanding, especially in cases where there is no additional support or respite care. It can be exceedingly difficult for those caring for the disabled person to reduce debt problems by seeking work because they are severely limited by the need to care for the person and lack appropriate and affordable alternatives to the care they provide, not to mention adequate support for the recipient of that care.
In many households, the lost of the person giving care’s income has been a primary cause for taking on debt. This is usually because the person providing the care must give it full time and can no longer work their previous job. This, then, leads to effects on the quality of life for both them and the disabled person they are providing care to.
The benefits income the disabled person is able to receive often sets the standard of living for their family or plays a large role in that aspect of family finances. In instances where the disabled person leaves the home or even dies, that loss of benefits can cause or worsen existing debt problems in a way that affects the entire family.
Mental Health Issues and Their Role on Disability-related Debt
Many people feel that the onset of depression, anxiety or other mental health problems begin the process of debt from disability. Those with previously existing mental health issues find that there can be serious consequences to coping with debt related stress. An unsympathetic and harassaing creditor, as an example, can really tax some people’s health and ability to cope. Beyond this, as horrific as it sounds, many dealing with mental health issues or other disability have been driven to the point of considering suicide simply out of a sense of alienation, helplessness and despair.
For some people, physical health issues have been worsened by anxiety over debt caused by illnesses. It’s extremely difficult to resolve debt when a person is already dealing with debt on top of mental health problems. It can make taking even the simplest steps to help one’s self excruciatingly difficult.
How Creditors Respond to Those with Disabilities Who Are in Debt
Creditor’s harassment, like barrages of telephone calls, ends up being not only damaging to the well-being of the disabled, but also extremely inefficient as a means of recovering debt. In some instances, the methods of debt repayment offered by creditors are not suited to people dealing with a certain impairment. Failure to provide adequate communication means or inaccessible buildings hinder a disabled person’s ability to negotiate with creditors, as well.
The means by which creditors help those in debt who face disabilities has a strong effect not only on the state of mind and sense of well-being for that person, but their very ability to resolve a debt issue. It has echoes that, in fact, affect all members of society in the UK.
Specialist Debt Support Unit
Debt problems faced by those with disabilities are often a combination of circumstances associated with the disability and related to having a low income that often results from physical setbacks. This lack of income can greatly increase the vulnerability to debt that people with disabilities experience, as well as restrict their access to basic services of necessity.
It’s been highlighted in the past that people living with disabilities face financial difficulties as an inherent side effect of their physical restrictions. Disabled people with debt concerns specifically face the consequences for the fact that their problems tend to stay hidden unless they have a particular means by which to deal with these problems.
In the UK, disability includes a variety of unique circumstances leading to debt that can include:
- People with physical impairments that require medical equipment for daily living
- People with mental health conditions that affect their everyday life
- A wide variety of learning-related difficulties can hinder understanding of aspects of debt and finances
- There are many types of sensory impairment that people suffer that can restrict their daily activities
Reasons for Debt from a Disability
There are a huge number of situations and factors that can lead to debt problems for those who are disabled that affect their lives and those who provide them with help. Here are just a few things possibly influential aspects:
- In times of personal crisis, financial concerns go understandably neglected
- Cost of respite care can lead to or increase debt
- Disability transport costs can lead to debt
- Cost of hiring people to provide care if one’s family cannot
- Because financial concerns are not focused on, benefits may not be claimed as they should
- Those who offer unpaid care often reduce their own finances to do so and their quality of life suffers as they try to help meet the needs of another suffering from a disability
- Often there can be a sudden drop in income when benefits halt or at the onset of the disability as a job is lost or a career left behind
- Dealing with debt can be difficult for those who experience a decline in their mental or physical health due to the stress of the debt itself
- Debt repayments can wreak havoc on already limited and fragile income
The Connections Between Disabilities and Debt
A great majority of those seeking debt help related to disabilities are either disabled people themselves or those who offer care. Often, one or both of these types of individuals are at a low income level or living in poverty.
These situations mean that debt is created in one or more of the following ways:
* Typically, a combination of circumstances and factors lead to debt form disability
* Costly, recurring purchases of specific items that are required by a disabling health condition
* Not enough assistance from the benefits system or none at all
* Often dealing with a disability means high telephone bills and high fuel bills
* At the onset of a disability or serious illness, debt can be acquired quickly as a person adjusts to the changes in lifestyle
* Expenses associated with a disability can lead to debts
* There can be a frequent need to replace crucial furniture
* Alteration of accommodations may be required
* A move may be needed to have a situation with better accommodations for the disabled
* Bearing the cost of replacing items damaged by a child with behavioural problems
* Those unable to use public transport may need to travel back and forth from the hospital by expensive taxis
* Income changes for those who take on the responsibility of caring for a disabled person, often the benefits do not match a previously earned salary for the care taker
Job Options and the Employment Market for Those with a Disability
Many disabled people experience a rapid accumulation of debt as they go through the process of adjusting to a disability or chronic illness. Even for those who find employment, the smallest alteration or additional demand put on their income could trigger debt struggles. Another reality is that merely being disabled can keep people excluded from obtaining a job. Despite strict UK employment laws, disabled people can experience difficulties if they are unable to seek work or work average hours.
A change in income like the loss of benefits or the earnings of a partner can also trigger debt. For those depending upon benefits long term, debts can not only be difficult to deal with, but may reoccur, as well. Just because a person is in receipt of DLA (Disability Living Allowance) does not guarantee that other goods and services are somehow affordable. Many times a person’s entire benefits end up being used to repay debts or simply meet general bills of the household.
Deferring Payments on Debt from Disability
If you have a disability you may need help deferring bills you cannot avoid as well as expenses such as rent or a mortgage or even council tax, heating bills and other basic expenditures. It is a good idea to contact bank or building society managers to arrange your mortgage and explain your situation if you are struggling with mortgage repayments.
Often building societies are prepared to suspend your payments for a few months to give you a chance to sort out your finances. It is extra helpful if you can have a social worker explain your situation in a report to give it extra validity in their eyes. You can also seek to extend your mortgage term in order to pay less monthly or even get it arranged so that you make interest-only payments in order to reduce your monthly expenses. You can often seek help paying the interest on your mortgage from the Department of Social Security.
If you speak with your local council office you may be able to defer your council tax payments and even get in touch with your local gas, water, telephone and electricity providers if you are experiencing difficulty making payments for these essential services.
If you have a neighborhood Law Centre near you, they may be able to advise you on issues regarding repayments. Get in touch with the Law Centres Foundation to learn more.
The Impact from Disability-related Debt on Those Caring for Disabled People
Giving care to a disabled individual can be both emotionally and physically demanding, especially in cases where there is no additional support or respite care. It can be exceedingly difficult for those caring for the disabled person to reduce debt problems by seeking work because they are severely limited by the need to care for the person and lack appropriate and affordable alternatives to the care they provide, not to mention adequate support for the recipient of that care.
In many households, the lost of the person giving care’s income has been a primary cause for taking on debt. This is usually because the person providing the care must give it full time and can no longer work their previous job. This, then, leads to effects on the quality of life for both them and the disabled person they are providing care to.
The benefits income the disabled person is able to receive often sets the standard of living for their family or plays a large role in that aspect of family finances. In instances where the disabled person leaves the home or even dies, that loss of benefits can cause or worsen existing debt problems in a way that affects the entire family.
Mental Health Issues and Their Role on Disability-related Debt
Many people feel that the onset of depression, anxiety or other mental health problems begin the process of debt from disability. Those with previously existing mental health issues find that there can be serious consequences to coping with debt related stress. An unsympathetic and harassing creditor, as an example, can really tax some people’s health and ability to cope. Beyond this, as horrific as it sounds, many dealing with mental health issues or other disability have been driven to the point of considering suicide simply out of a sense of alienation, helplessness and despair.
For some people, physical health issues have been worsened by anxiety over debt caused by illnesses. It’s extremely difficult to resolve debt when a person is already dealing with debt on top of mental health problems. It can make taking even the simplest steps to help one’s self excruciatingly difficult.
How Creditors Respond to Those with Disabilities Who Are in Debt
Creditor’s harassment, like barrages of telephone calls, ends up being not only damaging to the well-being of the disabled, but also extremely inefficient as a means of recovering debt. In some instances, the methods of debt repayment offered by creditors are not suited to people dealing with a certain impairment. Failure to provide adequate communication means or inaccessible buildings hinder a disabled person’s ability to negotiate with creditors, as well.
The means by which creditors help those in debt who face disabilities has a strong effect not only on the state of mind and sense of well-being for that person, but their very ability to resolve a debt issue. It has echoes that, in fact, affect all members of society in the UK.
Debt from Ill Health is More Common Than You Think
One of the more common problems that people end up finding themselves in debt due to is ill health. Unfortunately, the stress from debt also ends up being a contributing factor to health problems which creates something of a circle of negative effects.
Some of the common methods of UK debt management which may help solve ill health debt problems are:
1 – IVA (Individual Voluntary Arrangement)
1 – Debt Management Plan
3 – Protected Trust Deed (for residents of Scotland)
4 – Bankruptcy
There are so many reasons that people experience debt due to ill health. Here are a few reasons that you might not have thought of:
- In times of illness, finances are often understandably neglected
- A sudden drop in income is not unusual since it may lead to a loss of work
- The cost of tranport for treatment can increase debt
- The cost of respite care can also raise debts
- Situations of deteriorating health from illness due to the process of handling debt in the first place can make dealing with the debt even more difficult
- Food required for special diets or medicines needed to treat illness can lead to debt
- Ill health can force clients in physical labour jobs to lose work or stop working entirely
- Making payments on debts can drastically reduce the disposable incomes of those suffering illness
- Care service cost can sabotage the budgets of those with ill health
- Mental health related issues may mean those suffering are unable to work for significant periods of time
Job Options for Those Suffering Ill Health and the Employment Market They Face
Debt problems can pile up quickly as a person adjusts to the onset of ill health. Even those who can find employment, if they have a small income change or an extra demand placed on that income, they could find themselves in a debt problem. Merely being in ill health can also keep people from being able to get a job. Despite strict employment laws in the UK, people suffering from illness many times have difficulties because they are unable to work standard hours.
Debts from ill health can also occur when a there is a change in income due to the loss of a benefit or a partner’s earnings. Those suffering from illness who have a long term dependency on benefits it can be even more difficult to resolve this debt, especially fi they are receiving disability benefits and essentially at the mercy of the government for their income.
In the UK, the problem for some people who struggle with debt due to ill health is that they do not qualify for any Disability Living Allowance (DLA) due to technicalities in the law.
This can be a real struggle for those battling illness, but depending upon your payment history and whether your ill health is prone to be long or short term, you can sometimes get your lender to agree to:
- The lender may agree to reduce your payments over a period of time you both agree to
- The lender may charge interest for a shorter period of time if you have a repayment mortgage instead of having you pay both capital and interest
- The lender may extend your mortgage’s term in order to lower your payments
- The lender may offer you a ‘payment holiday’
Some reasons that people end up in debt can be:
- General financial over commitment
- Poverty
- Loss of work
- Illness
- Breakdown in their relationships
Debt and Illness – What if You Are In Debt Already?
Depending on your track record of making payments in a timely manner, if you have fallen behind then your lender can suggest ways to pay off the arrears gradually along with your usual payments. If you are unable to meet the extra payments you may be able to have them either delayed temporarily or added onto your loan.
You will want to pay as much as you can afford each month because keeping up with your usual payments (even if they are not in full) proves you are committed to repaying what you owe. If you can prove you are committed then your lender is likely going to be more sympathetic to your plight and possibly minimise the arrears charges, as well.
Some anonymous case studies (to protect personal identities in this sensitive aspect of life) regarding debt for those who suffer from ill health are featured below along with some examples of situations that cause this type of debt:
- Debt from ill health affects people’s emotional states by compounding severe stress
- Ill health renders many people unable to work
- Debt can be linked to uncontrollable physical conditions such as epilepsy
- Debt is often linked to suicide
Debt From Epilepsy
This is the case of a woman who bought a car with hire purchase whom we will refer to as Laura. Right after purchasing this car her doctor diagnosed her with epilepsy and Laura could no longer drive. Obviously, she decided she would need to sell this car. Upon informing her finance company of this decision, they told her she would not be able to sell the car privately and that, instead they would sell the car on her behalf then let her know what the remaining balance she owed would be. Later, the company informed Laura that she owed £8,000 plus £3,000 in insurance premiums for policies that could not be cancelled even though they covered risks related to not being able to pay on her loan even though this insurance was to be discharged. As you can see this situation would be incredibly difficult to cope with, not to mention highly unfair, but these are real life situations that people like Laura in the UK face when struggling with debt from ill health.
Ill Health Leaves Man Unable to Work
This case involves a man whom we will call Robert who lived on a very small income and therefore used credit cards in an effort to meet his basic essential needs. This results in £25,000 in unsecured debt on a total of six separate credit cards. Robert became unable to work due to his poor health, becoming more and more stressed by the debt accumulating due to this. He suffered a breakdown specifically tied to his inability to repay on his debt. Robert’s situation is also not unusual in the UK, sadly.
Debt Leads to Emotional Problems
A woman whom we will call Harriet had a hire purchase agreement for a car purchase. After two and a half years she defaulted after becoming temporarily unemployed. Harriet now lives with her parents and has a job once again. After becoming involved in a car accident that resulted in a fatality, Harriet was left with severe emotional trauma. On top of this, her mother suffers from ME. Harriet now must go to court due to defaulting on repayments, but three months after her default, she and her parents were receiving an average of twenty calls per day between 6am and 9pm. This greatly exacerbated Harriet’s emotional problems and her mother’s condition, as well. Once again, situations such as this are not entirely uncommon in the UK.
Debt Stress and Its Ties to Suicide
As extreme as it may seem on the surface, one man who we’ll call Phillip, lost his job because of ill health. He had several low debts that were not high priority. Despite this, Phillip was called frequently from highly aggressive debt collectors until he felt extreme distress and actually attempted suicide. Phillip’s situation represents the emotional state of many people who get in over their heads with debt they never expected to take on in the first place or believe they would be easily able to repay until a drastic, unexpected change in their finances took place..
A Brief List of How Debt Impacts People’s Lives
- Creditors are not always sympathetic about genuine tragedies debtors are faced with
- Some people are unable to cope, feeling as though they are in crisis and their health is subsequently affected
- Family arguments arise over debt and the strain it puts on families
- Some people seek treatment for stress, anxiety and depression related to the strain debt puts on their health
- The stress from debt and ill health leaves some unable to get and hold down jobs
- Debt stress can affect mental health and change people’s lifestyles towards unhealthy habits
If you are facing debt, whether from ill health or not, you owe it to yourself and your family to seek out a solution that can help you. You can learn more about Debt Management Plans or IVAs (Individual Voluntary Agreements) online or, if the situation you face is extremely dire, learn about Bankruptcy.
You need quality advice from an expert professional. Don’t hesitate to get the help you need because no one wants to see you enduring situations such as those described above.
Debt from Ill Health is More Common Than You Think
One of the more common problems that people end up finding themselves in debt due to is ill health. Unfortunately, the stress from debt also ends up being a contributing factor to health problems which creates something of a circle of negative effects.
Some of the common methods of UK debt management which may help solve ill health debt problems are:
1 –
IVA (Individual Voluntary Arrangement)
4 – Bankruptcy
There are so many reasons that people experience debt due to ill health. Here are a few reasons that you might not have thought of:
- In times of illness, finances are often understandably neglected
- A sudden drop in income is not unusual since it may lead to a loss of work
- The cost of transport for treatment can increase debt
- The cost of respite care can also raise debts
- Situations of deteriorating health from illness due to the process of handling debt in the first place can make dealing with the debt even more difficult
- Food required for special diets or medicines needed to treat illness can lead to debt
- Ill health can force clients in physical labour jobs to lose work or stop working entirely
- Making payments on debts can drastically reduce the disposable incomes of those suffering illness
- Care service cost can sabotage the budgets of those with ill health
- Mental health related issues may mean those suffering are unable to work for significant periods of time
Job Options for Those Suffering Ill Health and the Employment Market They Face
Debt problems can pile up quickly as a person adjusts to the onset of ill health. Even those who can find employment, if they have a small income change or an extra demand placed on that income, they could find themselves in a debt problem. Merely being in ill health can also keep people from being able to get a job. Despite strict employment laws in the UK, people suffering from illness many times have difficulties because they are unable to work standard hours.
Debts from ill health can also occur when a there is a change in income due to the loss of a benefit or a partner’s earnings. Those suffering from illness who have a long term dependency on benefits it can be even more difficult to resolve this debt, especially fi they are receiving disability benefits and essentially at the mercy of the government for their income.
In the UK, the problem for some people who struggle with debt due to ill health is that they do not qualify for any Disability Living Allowance (DLA) due to technicalities in the law.
This can be a real struggle for those battling illness, but depending upon your payment history and whether your ill health is prone to be long or short term, you can sometimes get your lender to agree to:
- The lender may agree to reduce your payments over a period of time you both agree to
- The lender may charge interest for a shorter period of time if you have a repayment mortgage instead of having you pay both capital and interest
- The lender may extend your mortgage’s term in order to lower your payments
- The lender may offer you a ‘payment holiday’
Some reasons that people end up in debt can be:
- General financial over commitment
- Poverty
- Loss of work
- Illness
- Breakdown in their relationships
Debt and Illness – What if You Are In Debt Already?
Depending on your track record of making payments in a timely manner, if you have fallen behind then your lender can suggest ways to pay off the arrears gradually along with your usual payments. If you are unable to meet the extra payments you may be able to have them either delayed temporarily or added onto your loan.
You will want to pay as much as you can afford each month because keeping up with your usual payments (even if they are not in full) proves you are committed to repaying what you owe. If you can prove you are committed then your lender is likely going to be more sympathetic to your plight and possibly minimise the arrears charges, as well.
Some anonymous case studies (to protect personal identities in this sensitive aspect of life) regarding debt for those who suffer from ill health are featured below along with some examples of situations that cause this type of debt:
- Debt from ill health affects people’s emotional states by compounding severe stress
- Ill health renders many people unable to work
- Debt can be linked to uncontrollable physical conditions such as epilepsy
- Debt is often linked to suicide
Debt From Epilepsy
This is the case of a woman who bought a car with hire purchase whom we will refer to as Laura. Right after purchasing this car her doctor diagnosed her with epilepsy and Laura could no longer drive. Obviously, she decided she would need to sell this car. Upon informing her finance company of this decision, they told her she would not be able to sell the car privately and that, instead they would sell the car on her behalf then let her know what the remaining balance she owed would be. Later, the company informed Laura that she owed £8,000 plus £3,000 in insurance premiums for policies that could not be cancelled even though they covered risks related to not being able to pay on her loan even though this insurance was to be discharged. As you can see this situation would be incredibly difficult to cope with, not to mention highly unfair, but these are real life situations that people like Laura in the UK face when struggling with debt from ill health.
Ill Health Leaves Man Unable to Work
This case involves a man whom we will call Robert who lived on a very small income and therefore used credit cards in an effort to meet his basic essential needs. This results in £25,000 in unsecured debt on a total of six separate credit cards. Robert became unable to work due to his poor health, becoming more and more stressed by the debt accumulating due to this. He suffered a breakdown specifically tied to his inability to repay on his debt. Robert’s situation is also not unusual in the UK, sadly.
Debt Leads to Emotional Problems
A woman whom we will call Harriet had a hire purchase agreement for a car purchase. After two and a half years she defaulted after becoming temporarily unemployed. Harriet now lives with her parents and has a job once again. After becoming involved in a car accident that resulted in a fatality, Harriet was left with severe emotional trauma. On top of this, her mother suffers from ME. Harriet now must go to court due to defaulting on repayments, but three months after her default, she and her parents were receiving an average of twenty calls per day between 6am and 9pm. This greatly exacerbated Harriet’s emotional problems and her mother’s condition, as well. Once again, situations such as this are not entirely uncommon in the UK.
Debt Stress and Its Ties to Suicide
As extreme as it may seem on the surface, one man who we’ll call Phillip, lost his job because of ill health. He had several low debts that were not high priority. Despite this, Phillip was called frequently from highly aggressive debt collectors until he felt extreme distress and actually attempted suicide. Phillip’s situation represents the emotional state of many people who get in over their heads with debt they never expected to take on in the first place or believe they would be easily able to repay until a drastic, unexpected change in their finances took place..
A Brief List of How Debt Impacts People’s Lives
- Creditors are not always sympathetic about genuine tragedies debtors are faced with
- Some people are unable to cope, feeling as though they are in crisis and their health is subsequently affected
- Family arguments arise over debt and the strain it puts on families
- Some people seek treatment for stress, anxiety and depression related to the strain debt puts on their health
- The stress from debt and ill health leaves some unable to get and hold down jobs
- Debt stress can affect mental health and change people’s lifestyles towards unhealthy habits
If you are facing debt, whether from ill health or not, you owe it to yourself and your family to seek out a solution that can help you. You can learn more about Debt Management Plans or IVAs (Individual Voluntary Agreements) online or, if the situation you face is extremely dire, learn about
Bankruptcy.
You need quality advice from an expert professional. Don’t hesitate to get the help you need because no one wants to see you enduring situations such as those described above.
Some tips and general advice on debt collection
If you are ever contacted by a debt collection help organisation, be sure to verify that they are licensed by the office of fair trading. With over 20,000 agencies and bailiffs specialised in UK debt collection, you are may end up having to deal with one of the more aggressive firms out there. These collection firms collect the debts of both private and public companies, so do your homework before dealing with them.
The principles that drove companies offering debt collection services, in a perfect world, would be fair, fast and professionally undertaken debt collection. However, more and more aggressive debt collection practices have led to the emergences of a greater number of complaints and general reports of bad practice in debt collection by consumers. Fortunately, there are decent firms out there who have signed up to “The Better Payment Practice Code” in order to provide genuine debt collection help that isn’t unethical.
To promote a better debt collection help practice within the UK, the Better Payment Practice Group was established. They work to urge all debt collection help firms to take on a responsible attitude when it comes to debtors paying in a timely matter. The Group allows debt collection help companies to sign up to the Better Payment Practice code and agree to maintain the four cornerstones of timely payment:
1. Agreeing to debt collection payment terms at the outset of a deal and sticking to them
2. Explaining debt collection payment procedures to suppliers in an effort to help them, as well
3. Paying bills in accordance with any contract agreed to by the supplier or required by the debt collection laws
4. Notifying suppliers immediately when an invoice is contested while helping to settle debt collection disputes quickly
Here are Some Options for Those in Need of Debt Collection Help
The IVA (Individual Voluntary Agreement)
An IVA is an effective and potent tool which enables to you not only clear your debt, but also to return to a clean financial balance on your accounts once again.
Bankruptcy
Considered an option that must be addressed once a person can no longer pay their debts as they fall due, bankruptcy genrerally allows a first time bankrupt to received their discharge a year after the bankruptcy order’s date.
Debt Management Plan
For those struggling to pay loans, store cards, catalogues or credit cards who want someone to help with sorting out payments and talking to credit cards, a Debt Management Plan may be the perfect solution. If a debtor can pay a single payment that they can afford towards all creditors then this can be an excellent way to cut that debt down over time.
Debt Consolidation Loans
You can consolidate your debt and reduce your payments each month by up to 50% with a proper debt consolidation loan.
Scotland Trust Deeds
For residents of Scotland who are in debt of £8,000 or more, a trust deed (also known as a protected trust deed) offers a legally binding debt repayment agreement. These trust deeds are only available to those residing in Scotland and last a maximum of 3 years. After this, the rest of the debt is written off and you are entirely debt free.
Tips for Dealing with Harassment from Creditors:
* Firstly, write to your creditor and in your communication, outline what you find offensive about the way the company is treating you. Let them know that you are familiar with the terms of the Administration of Justice Act’s Section 40. Ask them to take steps to avoid a repeat of the offensive behaviours that have exhibited towards you.
* Let you creditors know how you prefer to be contacted and ask them to confirm that they are in agreement with your request. If you send the letter during this early stage, you may avoid the trouble of having to take further action against the debt collection help company.
* Inform the creditor that you will consider making a complaint about their tactics under the guidance of the OFT Debt Collect Help Guidance. While it can be difficult to convince the police to prosecute in harassment cases until a more serious offence such such as fraud, blackmail or violence is involved, you should definitely make a complaint about any debt collection to your local council’s trading standards / consumer protection department.
* Your local council should invetigate whether an offence has been committed and wether prosecution is the correct next step. There is a fine of up to £5,000 in the Magistrates Court is a penalty is enforced. Also, a conviction can provide evidence that the creditor should not hold a consumer credit license to carry out debt collection help because they would be deemed no longer a ‘fit and proper person’ for that role. It may be worth considering contacting the Office of Fair Trading directly if the Trading Standards department doesn’t end up acting. While the OFT usually doesn’t take up individual complaints, their Debt Collection Help Enforcement Team does collect information which can be used to take the consumer credit license from abusive creditors. You may also wish to find out if the creditor is a member of a trade association that has a code of practice. If you find out they are a member of such an association you could write there with your complaint.
Additional Options for Debt Collection Help
Perhaps a final straw alternative is pursuing your own prosecution of an unruly creditor in the Magistrates Court. This could be expensive so you need proper legal advice before you decide to do this. A newer service from BT called “Choose to Refuse” may help if you are getting a high volume of calls from a particularly unpleasant creditor. You will need a pin number to key in after they’ve called you. Then, the caller will hear an automated message that states you do not wish to take their call once they ring. The service cost £8.00 per quarter. If your telephone service is through another provider, ask them if they have a similar feature available to you.
The Malicious Communications Act 1988 could be used in your favor, you can refer to it as it deals with letter or articles being sent for the purpose of causing “distress or anxiety.”
If you choose to try for a penalty to the creditor from the Magistrates Court, and it is successful with the creditor being found guilty, they will be fined. You must present a letter or article that was sent to you which contains one or more of these things:
- An indecent or grossly offensive message
- A threat
- Information which is either known or believed to be false by its sender
It is a criminal offence to cause “Harassment, alarm or distress” with intent by utilizing “threatening, abusive or insulting words or behaviour” under the Criminal Justice Act and Public Order Act 1994 Section 4a. However, this only counts as an offence if the action takes place in a public place outside your home. In order to prosecute for this offence, the police need to be contacted immediately after.
It is a criminal offence to harass people and put “people in fear of violence” under the Protection from Harassment Act 1997, also, but the harassment must happen on a minimum of 2 seperate occaisions and the police would need to agree to prosecute.
Some tips and general advice on debt collection
If you are ever contacted by a debt collection help organisation, be sure to verify that they are licensed by the office of fair trading. With over 20,000 agencies and bailiffs specialised in UK debt collection, you are may end up having to deal with one of the more aggressive firms out there. These collection firms collect the debts of both private and public companies, so do your homework before dealing with them.
The principles that drove companies offering debt collection services, in a perfect world, would be fair, fast and professionally undertaken debt collection. However, more and more aggressive debt collection practices have led to the emergences of a greater number of complaints and general reports of bad practice in debt collection by consumers. Fortunately, there are decent firms out there who have signed up to “The Better Payment Practice Code” in order to provide genuine debt collection help that isn’t unethical.
To promote a better debt collection help practice within the UK, the Better Payment Practice Group was established. They work to urge all debt collection help firms to take on a responsible attitude when it comes to debtors paying in a timely matter. The Group allows debt collection help companies to sign up to the Better Payment Practice code and agree to maintain the four cornerstones of timely payment:
1. Agreeing to debt collection payment terms at the outset of a deal and sticking to them
2. Explaining debt collection payment procedures to suppliers in an effort to help them, as well
3. Paying bills in accordance with any contract agreed to by the supplier or required by the debt collection laws
4. Notifying suppliers immediately when an invoice is contested while helping to settle debt collection disputes quickly
Here are Some Options for Those in Need of Debt Collection Help
The IVA (Individual Voluntary Agreement)
An IVA is an effective and potent tool which enables to you not only clear your debt, but also to return to a clean financial balance on your accounts once again.
Bankruptcy
Considered an option that must be addressed once a person can no longer pay their debts as they fall due, bankruptcy genrerally allows a first time bankrupt to received their discharge a year after the bankruptcy order’s date.
Debt Management Plan
For those struggling to pay loans, store cards, catalogues or credit cards who want someone to help with sorting out payments and talking to credit cards, a Debt Management Plan may be the perfect solution. If a debtor can pay a single payment that they can afford towards all creditors then this can be an excellent way to cut that debt down over time.
Debt Consolidation Loans
You can consolidate your debt and reduce your payments each month by up to 50% with a proper debt consolidation loan.
Scotland Trust Deeds
For residents of Scotland who are in debt of £8,000 or more, a trust deed (also known as a protected trust deed) offers a legally binding debt repayment agreement. These trust deeds are only available to those residing in Scotland and last a maximum of 3 years. After this, the rest of the debt is written off and you are entirely debt free.
Tips for Dealing with Harassment from Creditors:
* Firstly, write to your creditor and in your communication, outline what you find offensive about the way the company is treating you. Let them know that you are familiar with the terms of the Administration of Justice Act’s Section 40. Ask them to take steps to avoid a repeat of the offensive behaviours that have exhibited towards you.
* Let you creditors know how you prefer to be contacted and ask them to confirm that they are in agreement with your request. If you send the letter during this early stage, you may avoid the trouble of having to take further action against the debt collection help company.
* Inform the creditor that you will consider making a complaint about their tactics under the guidance of the OFT Debt Collect Help Guidance. While it can be difficult to convince the police to prosecute in harassment cases until a more serious offence such such as fraud, blackmail or violence is involved, you should definitely make a complaint about any debt collection to your local council’s trading standards / consumer protection department.
* Your local council should invetigate whether an offence has been committed and wether prosecution is the correct next step. There is a fine of up to £5,000 in the Magistrates Court is a penalty is enforced. Also, a conviction can provide evidence that the creditor should not hold a consumer credit license to carry out debt collection help because they would be deemed no longer a ‘fit and proper person’ for that role. It may be worth considering contacting the Office of Fair Trading directly if the Trading Standards department doesn’t end up acting. While the OFT usually doesn’t take up individual complaints, their Debt Collection Help Enforcement Team does collect information which can be used to take the consumer credit license from abusive creditors. You may also wish to find out if the creditor is a member of a trade association that has a code of practice. If you find out they are a member of such an association you could write there with your complaint.
Additional Options for Debt Collection Help
Perhaps a final straw alternative is pursuing your own prosecution of an unruly creditor in the Magistrates Court. This could be expensive so you need proper legal advice before you decide to do this. A newer service from BT called “Choose to Refuse” may help if you are getting a high volume of calls from a particularly unpleasant creditor. You will need a pin number to key in after they’ve called you. Then, the caller will hear an automated message that states you do not wish to take their call once they ring. The service cost £8.00 per quarter. If your telephone service is through another provider, ask them if they have a similar feature available to you.
The Malicious Communications Act 1988 could be used in your favor, you can refer to it as it deals with letter or articles being sent for the purpose of causing “distress or anxiety.”
If you choose to try for a penalty to the creditor from the Magistrates Court, and it is successful with the creditor being found guilty, they will be fined. You must present a letter or article that was sent to you which contains one or more of these things:
- An indecent or grossly offensive message
- A threat
- Information which is either known or believed to be false by its sender
It is a criminal offence to cause “Harassment, alarm or distress” with intent by utilizing “threatening, abusive or insulting words or behaviour” under the Criminal Justice Act and Public Order Act 1994 Section 4a. However, this only counts as an offence if the action takes place in a public place outside your home. In order to prosecute for this offence, the police need to be contacted immediately after.
It is a criminal offence to harass people and put “people in fear of violence” under the Protection from Harassment Act 1997, also, but the harassment must happen on a minimum of 2 seperate occaisions and the police would need to agree to prosecute.
